Microsoft reveals Xbox 360 Arcade replacement

Don't fancy forking over full whack for a new Xbox? Microsoft provides the solution.

Microsoft has confirmed that it's stopping production on the budget Xbox 360 Arcade - the cheapest of the Xbox range with a mere 256MB of built-in storage - and replacing it with a similar budget version of the new 360 sometime later this year.

The glossy black wonder of the new Xbox 360 Arcade will be available for a lowly $199 (or £134) in the States - $100 cheaper than its bigger brother.

Kinect will be available to buy as part of a bundle with the new 360 Arcade. Although no pricing (or the name "Arcade", for that matter) has been confirmed, US chain Gamestop may have leaked the bundle prices when it advertised them on its website - $299 for the Arcade bundle and $399 for the it's full-sized counterpart.